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Old 12-26-2012, 07:49 PM
Gostwriter Gostwriter is offline
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Default IS GC going out of business?

I was surprised to see that GC did not open early or stay open late during the holidays. Also noticed there are only two openings listed on career builder for GC in the entire country. Usually there are dozens of openings listed at any given time. Just wondering if that is a sign they are not doing well like everything else?
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Old 12-26-2012, 07:57 PM
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I think they are doing fine, ours is one of the busiest stores in the area. Its usually a good idea to go at certain times because you wont be able to walk around otherwise without bumping into others. Ours keeps a sign on the door when hiring and a salesman told me they get people in every day asking if they are hiring so definately no shortage of folks wanting to work there.
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Old 12-26-2012, 08:09 PM
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I think a lot of businesses are collectively holding their breath until the "fiscal cliff" thing is resolved one way or another.
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Old 12-26-2012, 08:17 PM
Wade Hampton Wade Hampton is offline
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My father, who's read the Wall street Journal daily since before I was born, says that GC/Musician's Friend, Gibson and Fender are all carrying terrifying, enormous amounts of debt. So, no, I don't think GC is doing all that well.

We don't have any Guitar Center stores here in Alaska, where I live, but I usually swing by the one in the Johnson County, Kansas suburbs of Kansas City when I make my annual visit to my hometown to see my father. In years past, that GC has had a robust inventory of the full model lines of Martin, Gibson and Taylor.

This trip there weren't any high end models by anybody, and just a sprinkling of mostly lowball Martins. They had a couple of Taylors and a couple of Gibson acoustics, but their acoustic guitar inventory was dominated by Seagulls and Asian-made instruments.

Now, I was there in late October. Maybe what I saw was just the lull before the Christmas season inventory arrived, but I don't think so - I always visit my Dad in October, and there has always been much more stock on hand at the GC than there was this trip.

So, yes, I think GC is in trouble.

Hope that makes sense.


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Old 12-26-2012, 08:24 PM
cedarkoa599 cedarkoa599 is offline
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I have one near me and I think it put all the rest of Taylor dealers out of business,yet by me they don't have much to pick from.
Not like when they were called Mars.

Last edited by cedarkoa599; 12-27-2012 at 09:13 AM.
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Old 12-26-2012, 08:31 PM
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Everything is over-hyped. Every business here is overflowing. The GC closest to me is always packed, as is every restaurant and theatre. I'm sure GC is fine. They could probably stand to close 40-50% of their stores but around here they are doing fine. Plus it's not GC. They are only part of a much larger organization.
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Old 12-26-2012, 08:31 PM
Gostwriter Gostwriter is offline
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I have noticed a lot of lower end models over the past year as well. I used to see a good number of $2,000 and above acoustic guitars; now they are like finding a needle in a haystack. I agree that lots of businesses are holding their breath (not all) If you just search open jobs on career builder - you'll find that Starbucks and Staples each have hundreds of jobs listed at any given time - but a lot of others seem to be hanging on by the skin of their teeth.
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Old 12-26-2012, 08:37 PM
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I haven't been by the Raleigh, NC GC since before Christmas, but they had a terrific high-end inventory back in late November. After this thread and discussion, I will make it a point to go by and check up on them this week. I would hate to see GC go under ... but I honestly admit, that I never buy guitars from them ... only strings and things.
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Old 12-26-2012, 08:59 PM
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Default cliff..huh...

dwalton.. you hit the nail on the head in my opinion
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Old 12-26-2012, 09:17 PM
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I'm seeing articles where Guitar Center, and by proxy Musicians Friend carries something like 1.6 billion in debt... However I don't subscribe to Moody's or S&P so I can't get any first-hand source. But they did sell for 2.1 billion in '07 including debt...

Albeit fender doesn't owe near that much but a massive majority of their 250 mil debt is due 2014...

http://www.nytimes.com/2012/09/30/bu...pagewanted=all
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Old 12-26-2012, 09:20 PM
harmonics101 harmonics101 is offline
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Oh for Pete's Sake, i'm sure GC is doing just fine.

Actually, I am contemplating buying a synthesizer and GC is probably my only option.

I bought a nice Roland Mobile Cube from them a while ago.

Have purchased a Sheryl Crow SJ through them and other stuff.

Sure, there might be some individuals hurting, but i've got some disposable income that is going GC's way.

Hope they stick around for awhile

Harmonics101
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Old 12-26-2012, 09:24 PM
tbp0701 tbp0701 is offline
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From what I gather, the debt is severe.

Here is some reading, if interested:
http://digitaleditions.sheridan.com/...&pre=&ver=flex

An excerpt:
Notwithstanding solid operational performance, Guitar Center has been hobbled by a crushing $1.56 billion debt burden that was incurred in late 2007 when Bain Capital acquired the business for $2.2 billion. Since the acquisition the company has consistently operated in the red, unable to cover the approximately $160 million in annual interest expense. The Steady losses have triggered regular credit "downgrades" from the ratings agencies Standard & Poor's and Moody's. In the most recent downgrade, issued on May 8th 2012 Standard and Poor's wrote " We have downgraded Guitar Center's liquidity profile to "less than adequate" and revised our ratings outlook to negative from stable.

Here's the S&P downgrade release if interested:
http://www.reuters.com/article/2012/...NA678920120508

They also say this: "Our ratings on Guitar Center reflect our assessment that the company's liquidity is 'less than adequate' but sufficient to avoid a default within two years." So, not impending doom, but they've got a lot of fixing to do.

So, yes, there is a lot of debt from the Bain buyout and going private, and I think all the acquisitions added still more (Fender and Gibson's acquisition sprees have likely left them with a lot of debt, too).

I think Bain also had GC focus more on where it makes the most money, mainly high end guitars and starter packs. Another interesting point in the first article is that GC sees much of its business and profit in its stores, not the Internet business. It probably isn't helping that both Amazon and Best Buy have pushed into the market and are generally capable of doing to GC what GC did to many smaller businesses. (Well, Best Buy has its own issues).

OK, that was far more than I had planned on typing. But my thoughts after all this is, no, GC is not going out of business, at least soon, but it has got to figure out how to handle its debt before the Bain overlords get nervous and start looking at ways to divest it.
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Old 12-26-2012, 09:44 PM
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Somewhat related but I can't see the +$2K production guitar market growing and actually am waiting for a big "adjustment".

The used market is the most consumer friendly as ever with bargains galore. So why buy new when you can wait a little and save $500 or more. Checking out the classifieds here is an affirmation of my decision to shop used if I want something.

So basically I have a better selection and prices here on the classifieds as opposed to visiting the GC where I see a reduction in higher end models and lofty new prices on those present.
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Old 12-26-2012, 09:55 PM
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If any shop is affected by all this economic insanity it is the local Mom and Pop. The big boys like GC/Musicians friend are in bed with Fender and a couple others to the tune of"if i go you go".
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Old 12-26-2012, 10:00 PM
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I agree. GC is likely doing just fine, but I do think they are watching their money closely. And also, there are countless used guitars that can be had for a sweet price. Don't hesitate to look for a used Taylor, Gibson, etc. Some are price far-too high, but if you are patient and can wait you just might find a real gem at a super price.

What I do see at GC is more mid-range guitars and fewer "high dollar." I'm seeing more of Taylor's $1000-1600 range, along with Gibson's "pro" and "artist" lines. The full-blown Hummingbirds, etc. and Taylor 814s, 816s, etc. are fewer than before.....Don 't be afraid to negoiate for a good deal. And don't be afraid to walk-away if you're not satisified with the price. GC now promises to beat internet prices from legitimate dealers.
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